Because we have handled many PIWM / Maven cases, we have accumulated thousands of pages of written materials regarding Tracy Sunderlage and Nikolai Battoo. This includes documents from the SEC, liquidators, correspondence, internal audits and some rather unique documents from the PIWM “mastermind” himself, Nikolai Battoo.
Battoo, and the folks doing his marketing such as Tracy Sunderlage, fooled many people. Some otherwise very sophisticated investors continue today to believe that there is simply some misunderstanding or that their funds will magically reappear. We have heard similar hopes from investors who refuse to hold their stockbroker responsible their losses.
Whenever someone tries to tell me that Nikolai Battoo is a misunderstood genius, I simply show him or her some of the letters Battoo wrote.
Is Battoo a genius? Hardly. In our opinion he is just another criminal. Don’t take our word for it, however.
On November 11, 2011, Battoo sent a letter to investors “temporarily” suspending quarterly valuations. The reason? The collapse of MF Global.
By now, most investors and the SEC concluded that the MF Global debacle was just a smokescreen to help Battoo buy more time. Even as investors were beginning to wake up and realize something was wrong, Tracy Sunderlage and a few stockbrokers were rumored to still be working the phones and seminar circuit in the hopes of recruiting new investors.
Let’s look at Battoo’s letter.
Nikolai Battoo on the safety of PIWM assets: “It is very important to point out that this suspension [of distributions] is only temporary as all of PIWM investments… are accounted for.”
Nikolai Battoo on Dodd Frank and protection from investment fraud: “It is truly amazing to me the uselessness of all the financial acts and preventative actions that have been written since the crisis of 2008, including the much venerated Dodd-Frank Wall Street Reform and Consumer Protection Act, which can be seen as a true joke that was supposed to do what again?”
Nikolai Battoo on MF Global CEO Jon Corzine: [W]hat we should have seen was that everyone in charge at MF Global (and especially Jon Corzine) should have been arrested that very day.”
Nikolai Battoo on MF Global: “The bottomline (sic) here is that the bankruptcy of MF Global is yet another example of greed and demonstrates the weaknesses of all these regulations currently in place along with the typical risk model structure that are complete failures in my opinion… Let’s just hope that the punishment fits the crime in the case of MF Global.”
In our opinion, Nikolai Battoo is a criminal. Not only did he steal, in many cases the money he stole represented the life savings of hard working people. By taking their savings – and then lying about where the money went – he stole more than just their hard earned money. He robbed his victims of hope and shattered their dreams.
Fortunately, most investors will get back something. There are parallel proceedings by the SEC and court appointed liquidators in the Bahamas. Those actions won’t recover much but it’s a start.
Investors who purchased PIWM or PIWM related investments (eg. Anchor Hedge funds, Maven) through a stockbroker, investment adviser or insurance agent may be able to collect from the people who marketed the investment. In most instances, those folks (or their employers) have errors and omissions insurance or “deep pockets.”
Once again, some investors tell us they are reluctant to bring a claim against their broker because he or she is helping them get back their money. We even know of one broker who sits on a creditors’ committee. That sounds great but in reality, the broker may just be trying to protect his own skin. Investors must always remember that the time to file claims is very limited and the receivership actions are very unlikely to make investors whole.
The author of this post, attorney Brian Mahany, has teamed up with Chapman Law to pursue cases against PIWM, Maven, Anchor Hedge Fund, First Fidelity, BC Capital and others who may be associated Nikolai Battoo and Tracy Sunderlage. We have successfully brought claims against insurance agents too.
Post by Brian Mahany, Esq.
Tagged: PIWM fraud, Maven fraud, Battoo fraud,